Many parents ask how to make sure the apartment or money they leave their child stays with that child even if the child’s marriage ends. Spouses themselves also want to know the status of an inheritance they receive. The answer begins with the law, but does not end there.
What does the law say?
Under section 5(a)(1) of the Spouses (Property Relations) Law, assets a spouse owned before the marriage, and assets received as a gift or inheritance during the marriage, are not included in the balancing of resources. In other words, the default is that an inheritance belongs to the person who received it.
So why is an agreement needed?
Because in practice this exclusion holds only as long as the asset remains separate. Common situations in which it may be weakened:
- Inheritance money is deposited in the joint account and mixed with family funds.
- An inherited apartment is registered in both spouses’ names.
- The money is used to buy a joint home or renovate the family home.
- The other spouse invests in the asset over the years, for example by paying the mortgage or renovations.
In such situations a claim may arise that there was an intention to share the asset with the spouse, and the court will examine the circumstances. A property agreement sets out the intention in advance and avoids having to prove it after the fact.
What can the agreement say?
- That inheritances and gifts, including future ones, remain the property of the recipient, even if used to buy a joint asset.
- How each spouse’s share is calculated in a home bought partly with inheritance money.
- What happens to income from the asset, such as rent from an inherited apartment.
Practical tips, even without an agreement
- Keep inheritance money in a separate account in the heir’s name only.
- Document the source of the money when it is used for a purchase.
- Register the asset in the heir’s name only, if that is the intention.
Parents who want to plan ahead
Parents can also draft their will or gift documents to make clear that the asset is intended for the child alone. But the final decision about what happens within the marriage belongs to the couple, so the property agreement remains the key tool. In a second marriage this question is even more complex; see prenups for a second marriage in Israel.
Next steps
Every couple comes with different circumstances, so the agreement should be built around yours. At Paz Israel & Co. Law Office we review your assets, your plans for the future and the right approval route with you. To learn more about the process, see our prenuptial agreement lawyer page, or contact us to arrange a meeting in Tel Aviv, Jerusalem or Modi’in.
This article provides general information about Israeli law and is not legal advice or a substitute for reviewing your specific circumstances.